June 2017 Performance
Theresa May’s gamble to hold an early general election spectacularly backfired as the Conservative Party failed to regain a majority in the House of Commons. Despite winning the largest share of the vote since Margaret Thatcher’s post-Falklands victory in 1983, the Tories will now have to rely on a patchwork “confidence and supply” deal with the Democratic Unionist Party of Northern Ireland. The result is an “own goal” for the Prime Minister and her position as leader has been badly compromised. The government’s negotiating position on Brexit has been weakened and the direction of the upcoming talks in Brussels has become less clear. The initial reaction in UK markets was muted, but investor confidence in the stability of the government has been dented. By the end of the month, the FTSE 100 had fallen -2.76% and the FTSE 250 declined -3.16%. The UK government bond market also came under heavy selling pressure following signals from the Bank of England that interest rates could potentially rise in the second half of the year. Inflation has climbed to 2.9% so it is little surprise that ten-year gilt yields rose sharply from 1.05% to 1.26%. This trend is likely to continue following comments from ECB President Mario Draghi, stating that he is prepared to taper back the quantitative easing programme on further evidence of a recovery in the eurozone. Sterling rose 1.06% versus the US dollar and closed marginally below its highest level in more than one year. Commodity markets were weaker and the GSCI declined -1.80%. Gold fell -2.12% and the price of WTI oil lost -4.72% before finishing at $46.04 per barrel. Investor rotation away from long-dated government securities into short-dated corporate bonds and equities is underway. Portfolio diversification across global markets will be vital over the summer months, especially on a currency hedged basis.
ACUMEN Bond Portfolio
The ACUMEN Bond Portfolio returned -0.48% in June. The Market Composite Benchmark and the IA Mixed Investment sectors returned -0.77% and -1.10% respectively.
ACUMEN Conservative Portfolio
The ACUMEN Conservative Portfolio returned -0.69% in June. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned -0.29% and -0.64% respectively. The portfolio has a rolling 1-year return of 8.82%.
ACUMEN Income Portfolio
The ACUMEN Income Portfolio returned -0.97% in June. The Market Composite Benchmark and the IA Mixed Investment 20-60% Shares sector returned -0.27% and -0.64% respectively. The portfolio has a rolling 1-year return of 10.91%.
ACUMEN Progressive Portfolio
The ACUMEN Progressive Portfolio returned -0.96% in June. The Market Composite Benchmark and the IA Mixed Investment 40-85% Shares sector returned -0.23% and -0.79% respectively. The portfolio has a rolling 1-year return of 14.70%.
ACUMEN Adventurous Portfolio
The ACUMEN Adventurous Portfolio returned -1.32% in June. The Market Composite Benchmark and the IA Global sector returned -0.21% and -0.52% respectively. The portfolio has a rolling 1-year return of 15.55%.
ACUMEN Equity Portfolio
The ACUMEN Equity Portfolio returned -0.81% in June. The IA Global sector returned -1.82%.
ACUMEN Strategic Portfolio
The ACUMEN Strategic Portfolio returned -1.24% in June. The IA Specialist sector returned -1.21%.
The value of an investment in the Protection Portfolios, ACUMEN Portfolios or Tavistock PROFILES may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Asset Management Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated.